Why Tropical Countries are Underdeveloped

"In 1820, GNP per capita in the tropical regions was roughly 70 percent of
GNP in the temperate-zone. By 1992, GNP per capita in the tropical regions was 25
percent of that in the temperate-zone."

The strongest link in explaining the wealth and poverty of nations is the
relationship between ecological zones and per capita income, according to NBER
Research Associate Jeffrey Sachs. Yet, most recent cross-country analyses of
economic growth have neglected the importance of physical geography.

Despite their varied economic, political, and social histories, almost all of the
tropical countries remain underdeveloped at the start of the 21st century. Only two
tropical-zone countries, Hong Kong and Singapore, rank among the 30 countries
classified as high-income by the World Bank. All of the high-income regions -- North
America, Western Europe, Northeast Asia, the Southern Cone of Latin America, and
Oceania -- are outside the tropics. When temperate-zone economies are not rich,
there is typically a straightforward explanation, such as decades under communism.
Sea navigable regions are generally richer than land-locked nations. Those that are
both tropical and land-locked - including Bolivia, Chad, Niger, Mali, Burkina Faso,
Uganda, Rwanda, Burundi, Central African Republic, Zimbabwe, Zambia, Lesotho
and Laos - are among the very poorest in the world.

In Tropical Underdevelopment
(NBER Working Paper No. 8119),
Sachs uses geographic information system mapping to combine climatic and economic data. He
observes that in 1820, GNP per capita in the tropical regions was roughly 70
percent of GNP in the temperate-zone. By 1992, GNP per capita in the tropical
regions was 25 percent of that in the temperate-zone. Thus, between 1820
and1992, GNP per capita in the temperate region grew at an average annual rate of
1.4 percent, compared with 0.9 percent a year in the non-temperate region.

Between 1960 and 1992, both regions grew at about 2.3 percent per year.
This reflects fast growth in non-temperate zone Asia of 2.9 percent per year, and
continued poor performance in Africa and Latin America.

At the core of this long-term growth was the continued development of
technology, a process that has benefitted the temperate-zone countries much more
than the tropics. Production technology in the tropics has lagged behind temperate-zone technology in the two critical areas of agriculture and health. The difficulty of
mobilizing energy resources in tropical economies also has contributed to the
income gap between climate zones. The problems of applying temperate-zone
technological advances to the tropical setting have amplified these factors.
Agricultural, health, and some manufacturing-related technologies that could diffuse
within ecological zones could not diffuse across them.

For the major crops (rice, maize, and wheat), productivity is considerably
higher in the temperate-zone than in the tropical-zone: Sachs estimates that in
1995, productivity per hectare of grain produced was approximately 50 percent
higher in temperate-zone countries. The explanation lies in soil formation and
erosion, pests and parasites, water availability, and the effects of tropical climates
on plant respiration. Poor nutrition, resulting from poor agricultural productivity, in
turn contributes to poor health. Sachs argues that economic development in tropical
eco-zones requires a concerted international effort: agricultural technologies must
be specific to the needs of tropical economies.

The burden of disease is considerably higher in the tropics than in temperate
climates. Even after controlling for GNP per capita, health outcomes are far better
in temperate-zone countries: infant mortality in temperate-zone countries is 50
percent lower; life expectancy in temperate countries is 8 percent higher. Infectious
diseases affected all parts of the world in the 19th century. Temperate-zone
infectious diseases were partially brought under control through a combination of
improved nutrition, societal adjustment to diseases, improved public sanitation, and
the introduction of immunization. Tropical vector-borne diseases, such as malaria
and helminthic infections, have proved much harder to control. Ecology affects the
transition of many important diseases, some of which are now confined to tropical
countries.

The income gap also has been amplified in the tropics as poor public health
and weak agricultural technology have combined to slow the demographic
transition from high fertility and mortality rates to low fertility and mortality rates.
Imbalances in geopolitical power too have played a role, for example the domination
of global financial and development institutions by the rich, temperate-zone
countries. This in turn might help to explain why the importance of physical
geography in the development debate, and in framing development policies, has
been neglected.

-- Andrew Balls

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